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Core consumer prices in the Dallas-Fort Worth area rose at a slightly faster pace over the last two months than the national average.

The regional consumer price index rose 0.5 percent for April and May, according to the data released today by the Southwest Office of the U.S. Bureau of Labor Statistics. That increase follows a 1.2-percent price gain in February and March after declines for the previous three bi-monthly periods.

In comparison, the U.S. Consumer Price Index (CPI) rose 0.4 percent in May, seasonally adjusted, the BLS also reported today. In April, the national index rose 0.1 percent. The national data is monthly, while local data covers for two months at a time.

Higher energy costs, especially gasoline prices, drove the overall D-FW and U.S. price increases. Local energy costs grew faster than the national average.

In D-FW, energy costs were up 6.3 percent, as a decline in household energy costs only partially offset a 14.4 percent jump in gas prices. Nationally, energy costs rose 4.3 percent and gas prices were up 10.4 percent.

Last week, the average price of a gallon of regular unleaded gas in Texas was $2.99, or 10 cents less than a week ago, according to the AAA Texas. Nationally, the average price of gas also has dropped but Texans are paying 17 cents less than the national average of $3.16.

“The rule of thumb is that every penny dip in gasoline prices puts an extra $1 billion in the hands of U.S. consumers over the course of a year,” according to Robert A. Dye, chief economist for Dallas-based Comerica Bank. “Some of those pennies will go to saving, some to paying down debt, but the bulk of it will go to purchasing more stuff.”

Food: Food prices continued to rise. D-FW food prices rose 1.4 percent, with groceries up the most (+2.2 percent). Food prices away from home for restaurants and such rose 0.4 percent, the first price movement in the index since January. That was higher than the national 0.7 percent increase in food prices.

Over the last 12 months, D-FW food prices rose 2.7 percent, with grocery costs up 3.5 percent and prices at restaurants and bars up 1.5 percent. Nationally, U.S. meat prices have risen 13 percent in the last 12 months, with beef and veal prices up nearly 18 percent and pork prices up 11.4 percent. U.S. butter prices have risen nearly 24 percent in the last year.

Clothing: Clothing prices, especially for women, rose 7.2 percent in D-FW — the highest increase of any major category tracked by the BLS for the region. Nationally, clothing prices rose 3.7 percent.

Over the last 12 months, clothing prices were relatively flat in North Texas and nationally.

Other: Higher prices also were seen in D-FW for apartment rental rates, and education and communication. D-FW transportation costs fell 2.7 percent and the cost of household furnishings and operations dropped 2.2 percent.

Over the last 12 months, the D-FW area saw higher prices apartment rental rates (4.7 percent) and medical care (+1.9 percent). The cost of household furnishings and operations fell 4.3 percent and the cost of transportation was down 2.8 percent.

Nationally, consumers paid more for all types of services — from hotels and home insurance to lawn care and medical care — in the last 12 months. Some of the biggest price increases were for women’s outerwear (+11 percent), children’s footwear (+7.8 percent), lodgings away from home (+5 percent) and prescription drugs (+3.8 percent). Some of the biggest price declines were for televisions (-4 percent), toys (-6 percent), personal computers (-8 percent), and laundry appliances (-6.8 percent).

So, what does all this mean for the economy?

The U.S. inflation rate, which is based on the CPI, was 1.7 percent as of September — below the Federal Reserve’s target rate of 2 percent.

That has rekindled “worries of deflation,” Wells Fargo economists Sam Bullard and Sarah Watt House wrote today in a research note.

Inflation — as well as job growth, the unemployment rate and other economic indicators — will factor into the Fed’s policy setting committee meeting next week.

Some economists today noted that softer inflation makes it less likely the Fed will start increasing interest rates before June 2015. Comerica’s Dye still expects the Fed next week to announce the planned ending of its asset purchase program.

The rise in consumer prices slowed in the Dallas-Fort Worth area and nationally in July, easing immediate pressures on the Federal Reserve to raise interest rates.

Prices in the Dallas-Fort Worth area were flat in June and July, after rising 0.4 percent in April and May, according to data released today by the U.S. Bureau of Labor Statistics. Energy prices rose 0.6 percent in the last two months, but food prices were unchanged, after increasing 0.6 percent in April and May.

Nationally, consumer price increased slowed for the second straight month in July.

For the last 12 months, D-FW consumer prices have not increased as much as prices nationwide. D-FW overall prices area as energy costs were up 1.9 percent (natural gas climbed 21.2 percent) and food prices were up 1.5 percent. U.S. overall prices rose 2 percent, including a 2.6 percent increase in energy costs and a 2.5 percent gain in food costs.

But Paul Dales, senior U.S. economist for Capital Economics, thinks core inflation will surpass 2 percent early next year, putting further pressure on the Fed to raise interest rates in March rather than in June.

Wells Fargo economists Sam Bullard and Sarah Watt House expect the pace of consumer inflation to gradually pick up over the next 18 months as economic output and wage growth improve.

Inflation — along with employment and unemployment — are sure to be discussed by Fed officials and central bankers worldwide as they meet this week at an annual summit in Jackson Hole, Wyo.

Nationally, seasonally adjusted consumer prices rose 0.4 percent in May — the largest increase since February 2013 — after rising 0.3 percent in April, according to BLS data.

Rising inflation — not too long after fears of deflation — probably isn’t enough for the Fed to alter its pace of reducing its economic stimulus program. The Fed has been reducing its bond buying by $10 billion a month since January.

However, the latest pricing data means that the Federal Reserve “will have to acknowledge in tomorrow’s policy statement that price pressures” continue to grow, according to Paul Dales, a senior economist for Capital Economics. It also means chances are increasing that the Fed could raise interest rates, which have been near zero since 2008, before the expected time frame of mid-2015, he said today in a research note.

In Dallas-Fort Worth, a 3.5-percent increase in energy costs accounted for most of the total increase in prices. A 5.3-percent rise in electricity prices combined with a 2.9-percent rise in gasoline costs led higher energy costs. Local food prices were up 0.6 percent.

Nationally, prices increased in many areas, including housing, electricity, food, airfare (up 5.8 percent), gasoline, medical care, clothing and cars. However, the U.S. food index rose 0.5 percent last month — its largest increase since August 2011.

Dallas-Fort Worth’s core inflation was unchanged in April and May. U.S. core inflation in May rose 0.3 percent — the biggest gain since August 2011.

For the last 12 months, Dallas-Fort Worth consumer prices increased 1.8 percent (see chart above), slightly below the U.S. core inflation rate of 2.1 percent for the same period.

Locally, energy costs led the increase, up 3.4 percent (natural gas prices were up 31 percent) over the last year. Food prices rose 1.7 percent, with a bigger gain at restaurants than grocery stores as businesses pass on their higher costs to consumers. Core inflation was up 1.7 percent, mainly due to higher housing costs.

Nationally, food prices rose 2.5 percent in the last 12 months, with groceries up slightly more. Prices for meat, poultry, fish and eggs are up 7.7 percent. Energy prices were up 3.3 percent.

The U.S. Consumer Price Index and core inflation rose faster in May than economists’ consensus expectations.

Richard Fisher, president of the Federal Reserve Bank of Dallas, said today that he is not worried about the nation’s low level of inflation — and won’t support policies that drive it above the 2-percent goal.

“We are in that region of 1 to 2 percent; I am not uncomfortable with that,” Fisher said according to news reports. “I am a hawk as they call it in the aviary of the Federal Reserve, and I will not tolerate, nor will I vote for, policy if I lift that rate beyond the 2 percent long-term target that almost every central bank in the world has.”

The annualized U.S. inflation rate was less than 1 percent in February.

Fisher, who votes this year on the Fed’s policy setting committee, spoke at the Texas Public Policy Foundation Conference in Austin.

Fisher’s comments come on day after the government reported that consumer prices continued to surge across North Texas and the country as of March. Pricing pressure also is starting to show at the business level: Food prices in the U.S. Producer Price Index for March nearly doubled from February. I wrote about those prices updates yesterday and about rising food prices on Monday.

Some economists think consumer demand will rise as the economy continues to improve, squeezing business profit margins and pushing inflation higher.

Fed chairwoman Janet Yellen said today the central bank is at least two years away from reaching its goals of maximum employment and 2 percent inflation. She spoke at the Economic Club of New York.

The nation’s low inflation rate appears to be partly due to temporary factors, such as declining consumer energy prices, Yellen said.

Yellen noted that some of the broader measures of “labor market slack,” such as part-time and long-term unemployment, “have fallen a bit more than the headline unemployment rate.” As labor market slack improves, it should help inflation move closer to the 2 percent goal, she said.

Yellen reiterated that “interest rates should remain well below normal long-run levels, even when the unemployment rate [has] fallen back in line with its long-run level and inflation was back at the 2-percent target,” Paul Ashworth, chief U.S. economist for Capital Economics, said in a report today. “We’re far from convinced the Fed can pull that off without triggering a rise in inflation above its 2-percent target.”

Yellen today noted the risks of inflation being persistently below 2 percent and rising “substantially above” 2 percent. She rates the chances of the latter as “significantly below” the chances of the former.

Overall, Ashworth said Yellen was “a little less dovish” than her other comments in the last month.

U.S. inflation remains low, but some food prices, such as for meats, are up significantly due to global supply problems from drought and disease. (Sue Ogrocki/The Associated Press)

Consumer prices continued to surge in March as people in North Texas and across the country paid more for many key products, allaying some economic concerns about deflation.

The overall Consumer Price Index for the Dallas-Fort Worth area rose 1.1 percent in February and March, compared with a 0.4 percent gain in December and January, according to bi-monthly regional data released today by the U.S. Bureau of Labor Statistics. Prices were up 1 percent over the last year.

Nationally, the Consumer Price Index rose a stronger-than-expected 0.2 percent for the month of March and was up 1.5 percent for the year ended March mostly due to higher food prices, according to BLS data also released today.

I wrote a story today that some food prices — from meats and cheese to limes and oranges — had risen because of global supply problems from drought and disease.

D-FW food prices didn’t change over the last two months, but were up 1.5 percent in the last year. The local energy price index rose 6.3 percent in February and March, but it was down 1.4 percent over the last year. Housing and apparel prices were higher for both the two-month and 12-month period.

U.S. food prices rose 0.4 percent in March and were up 1.7 percent over the last year — both driven by the cost of food at home (groceries). The price indexes for meats, poultry, fish and eggs; fresh fruits and vegetables; and dairy and related products were all up around 1 percent.

“A dominant theme so far this year has been the robust performance from food prices,” Wells Fargo senior economist Sam Bullard wrote today in a report. “Historic drought conditions in California have had a disruptive impact on fruits, vegetables and dairy product prices in recent months. Record-high beef prices are also drawing a lot of attention.”

“Food price increases are expected to make further gains in the second quarter — a kick in the stomach for those households that have a hard time making ends meet,” Chris G. Christophe Jr., director of consumer economics for IHS Global Insight, said today in a report.

“Overall, the consumer inflation story is relatively bland,” IHS’ Christophe said. “However, the direction of food prices is somewhat worrisome. Average consumers will have no cause to consider inflation rampant, but living standards will suffer as a larger percentage of household budgets are spent on grocery store bills, leaving less for discretionary spending.”

Core prices — excluding food and energy — rose 0.2 percent mainly due to increases in housing (its largest increase since March 2008), clothing and airline tickets, according to the BLS.

It’s difficult to compare prices for the Dallas-Fort Worth area to the national average because the U.S. data is adjusted for seasonal variations, but regional data is not.

It appears the D-FW consumer price index was relatively stable last month, reflecting the U.S. trend of higher housing prices but lower energy prices.

D-FW Consumer Price Index components

1-month

12-month

(not seasonally adjusted)

% change

% change

as of October

as of October

Grocery

-0.3

0.7

Housing

0.5

3.9

* Rental

0.4

4.3

* Owned property

0.4

3.8

Energy

-2.7

2.4

Gasoline (all types)

-4.4

8

Household energy

-0.1

-5.5

* Electricity

-0.9

-4.8

* Natural gas

5.1

-11.9

Nationally, the CPI rose 2.2 percent and core prices were unchanged over the last 12 months.

Leslie Levesque, a senior economist for IHS Global Insight, expects U.S. prices to remain relatively stable for the rest of the year. Falling gas prices should ease holiday travel costs, but rising food prices “will be a downer,” she said.

Consumer prices in the Dallas-Fort Worth area rose slightly faster than the national rate for the last two months combined, according to data released today by the U.S. Bureau of Labor Statistics.

The D-FW Consumer Price Index rose 1.3 percent in August and September after falling in the each of the two previous bimonthly periods. The CPI increased an average of 1 percent in the same period across the country.

Higher gasoline prices accounted for most of the increase — up 10.1 percent in D-FW and up 11.6 percent nationwide in the two-month period. The overall energy index rose 6.1 percent for North Texas, representing half of the total CPI increase.

Here are other price results for the D-FW area for August and September:

* Local food prices rose 0.5 percent. Grocery prices edged up 0.2 percent, but prices for food at restaurants, bars and other places rose at a faster pace — up 1.0 percent.

* The index for all items minus food and energy (core inflation) rose 0.8-percent, after little change in the previous two-month periods.

Consumer prices in D-FW also rose faster than the national average for the 12 months ended Sept. 30. Prices in D-FW rose 2.3 percent vs. a gain of 2 percent nationwide.

Again, energy costs were up the most, with gasoline prices up 6.8 percent in D-FW and across the country for the 12-month period. The CPI showed that natural gas prices dropped 37.1 percent (the largest category decline) and electricity prices were down 2.2 percent in North Texas.

For the 12 months, D-FW food prices rose 2.2 percent and the index for all items minus food and energy increased 2.4 percent. The largest price increase outside of energy was a 4.4 percent increase in apartment rental rates in North Texas, according to the BLS data.